N.Y. Comp. Codes R. & Regs. tit. 20 § 414.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 414.2 - Governmental entities

Tax Law, §§ 284(1), 289-c

(a)

(1) The United States of America and any of its agencies and instrumentalities may:

(i) import or cause motor fuel to be imported into New York State;

(ii) produce, refine, manufacture or compound motor fuel in New York State; or

(iii) purchase motor fuel in New York State, for their own use or consumption without payment of, or in the case of a purchase of such fuel, without having had passed through to them, the motor fuel tax imposed pursuant to article 12-A of the Tax Law.

(2)

(i) The United States as used in this section includes any department, office, bureau or other agency of the government of the United States.

(ii)Agencies and instrumentalities of the United States as used in this section means any governmental authority, commission or independent board created by an Act of Congress for a public purpose, and which is immune from state taxation. Some entities, although created by an Act of Congress, are not governmental entities and are not exempt from the motor fuel tax. Where Congress has waived immunity from taxation with respect to instrumentalities or agencies of the United States, no exemption from tax will exist. Further, states of the United States and their political subdivisions (excluding New York State), the District of Columbia, and territories and possessions of the United States are not exempt from the motor fuel tax.

(b)

(1) New York State, any of its agencies, instrumentalities, public corporations or political subdivisions may:

(i) import or cause motor fuel to be imported into New York State;

(ii) produce, refine, manufacture or compound motor fuel in New York State; or

(iii) purchase motor fuel in New York State, for their own use or consumption without payment of, or in the case of a purchase of such fuel, without having had passed through to them, the motor fuel tax.

(2)

(i)New York State as used in this section includes any department, office, bureau or other agency of the State of New York.

(ii)Agencies and instrumentalities of the State as used in this section means any authority, commission or independent board created by an act of the Legislature for a public purpose.

(iii) A public corporation as used in this section means any corporation created by an act of the Legislature for a public purpose or pursuant to an agreement or compact with another state or Canada.

(iv) A political subdivision as used in this section means a county, town, city, village, school district, fire district, special district corporation and board of cooperative educational services of this State.

(c)

(1) Where a governmental entity as defined in this section imports motor fuel or causes motor fuel to be imported into New York State or produces, refines, manufactures or compounds motor fuel in New York State for its own use or consumption, such entity is a distributor of motor fuel and must be registered as a distributor and report these activities monthly, by filing returns with the Department of Taxation and Finance, even though no tax may be due. In the event the governmental entity does not use or consume all such motor fuel and otherwise distributes the fuel in the State, it is subject to the tax imposed pursuant to article 12-A of the Tax Law on the motor fuel distributed.

(2) Where motor fuel is purchased by a governmental entity, without the seller passing through the motor fuel tax, and such fuel is not used or consumed by the entity, but is otherwise distributed in the State, such entity is jointly and severally liable with the recipient of the motor fuel for the payment of the motor fuel tax.

(3) Motor fuel used by contractors in connection with work done for United States governmental entities or New York State governmental entities is not exempt from tax. Accordingly, where such contractors import or cause motor fuel to be imported into New York State or produce, refine, manufacture or compound motor fuel in New York State they are liable for the motor fuel tax and must be registered as distributors of motor fuel. Purchases of motor fuel by contractors having contracts with governmental entities are also not exempt from the motor fuel tax. Such tax must be passed through to a purchasing contractor by a seller of motor fuel and included in the contractor's purchase price of the motor fuel. However, contractors may be reimbursed for taxes paid in respect of motor fuel consumed in off-highway services pursuant to the provisions of section 415.3 of this Title.

(d)

(1) United States governmental entities and New York State governmental entities (as defined herein) may purchase motor fuel upon which the seller has not passed through the motor fuel tax by issuing to the seller of such fuel a signed government purchase order, a signed government purchase contract or an appropriate exemption document. For purposes of this subdivision, an appropriate exemption document must be made by the governmental entity claiming an exemption from tax, on its letterhead or on a printed form issued by it, identifying itself as an exempt United States governmental entity or as an exempt New York State governmental entity. An appropriate exemption document must also contain a statement to the effect that the motor fuel being purchased will be used or consumed exclusively by the subject governmental entity. Such document must be signed and dated by a duly authorized representative of the governmental entity seeking an exemption from the motor fuel tax.

(2) Whether a single tax-exempt purchase of motor fuel is made or multiple tax-exempt purchases of motor fuel are made, pursuant to any particular purchase order, purchase contract, or appropriate exemption document, each delivery of motor fuel must be substantiated as being exempt from tax with an individual bill, invoice, receipt or other form of written evidence given by the seller showing the governmental entity as the purchaser. Every bill, invoice, receipt or other form of written evidence must indicate the quantity of motor fuel received, the purchase price of the fuel without regard to any exemption and the price paid or to be paid by the exempt purchaser for such fuel. In addition, such evidence of exemption must be signed and dated by the individual taking delivery of the motor fuel on behalf of such entity. Sellers of motor fuel must establish a system of associating these individual bills, invoices, receipts and other forms of evidence with the applicable purchase orders, purchase contracts or appropriate exemption documents.

(e) All purchases of motor fuel upon which the seller has not passed through the motor fuel tax by a United States governmental entity or a New York State governmental entity must be billed directly to the governmental entity and paid from the funds of such entity. Alternatively, where a governmental entity has substantiated its exempt status to an oil company and such company consents to issuing credit cards to the entity for purposes of purchasing motor fuel, individual purchases will be charged to such credit card accounts as if no exemption exists. Purchases of motor fuel so charged to such authorized credit cards will then be billed to the entity, exclusive of the taxes from which the purchaser is exempt.

(f)

(1) Any person selling motor fuel to a governmental entity for such entity's own use or consumption, as described in this section, who has not passed through to the entity the motor fuel tax, will be allowed a refund or credit in the amount of the motor fuel tax paid or assumed by, or passed through to such person but not passed through to the exempt purchaser. A refund or credit will also be allowed to any oil company in the amount of any tax paid or assumed by, or passed through to such company with respect to purchases of motor fuel billed a governmental entity exclusive of the motor fuel tax as described in subdivision (e) of this section. Records sufficient to substantiate all exemptions and any refund or credit claimed on the basis of such exemptions must be maintained by the seller. (See Part 415 of this Title for refunds, credits and reimbursements.)

(2) A registered distributor must report motor fuel sold to a governmental entity in its monthly return of tax on motor fuels and may deduct the quantity so sold in arriving at the net taxable gallonage to the extent such fuel was sold without passing through to such entity the motor fuel tax.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 414.2